The procurement landscape is on the cusp of a significant transformation, with generative AI at the forefront of this change.

Recent research from Gartner sheds light on how procurement leaders are approaching this powerful new technology.

At LightSource, we see these trends firsthand as we partner with companies to illuminate their path toward a more intelligent and efficient procurement process.

The Drive for AI in Procurement is Coming from All Levels

A key takeaway from the Gartner research is that the push for generative AI is not just a top-down mandate.

While 62% of the drive to implement generative AI comes from the top, a significant 38% is a bottom-up push from procurement professionals themselves.

This indicates a strong desire from users to leverage technology that can help them perform their jobs more effectively and efficiently.

This aligns with what we see at LightSource, as we often collaborate with both procurement leaders and their teams to identify and solve day-to-day challenges. This is a clear signal that procurement teams are eager to accelerate their capabilities and focus on more strategic work.

High Expectations for Generative AI Adoption and Impact

A substantial majority of procurement organizations are moving quickly to adopt generative AI. According to the research, 15% have already implemented generative AI, and another 58% are planning to implement it within the next 12 months.

This rapid adoption is fueled by high expectations for significant returns. Procurement organizations anticipate a 22.7% increase in productivity and a 12.5% reduction in costs over the next 12-18 months from their generative AI initiatives.

At LightSource, we help our clients realize these benefits by focusing on practical applications of AI; the platform is purpose-built to empower teams with intelligent automation.

This frees up time for strategic thinking and better decision-making

Top Benefits and Use Cases for Generative AI in Procurement

The primary goals for implementing generative AI are clear. Procurement leaders are looking for:

• Increased productivity (62%)

• Cost reduction (34%)

• Improved business agility (29%)

To achieve these benefits, organizations are prioritizing several key use cases:

• Sourcing and contract life cycle management (CLM): 18% of organizations are focused on this area.

• Supplier information discovery and management: 17% of procurement leaders are exploring this use case.

• Supplier communications: 15% see this as a key area for AI implementation.

Navigating the Challenges of AI Implementation

Despite the enthusiasm, procurement organizations are realistic about the challenges ahead. The top concerns include:

• Data accuracy, reliability, and transparency (49%)

• Compatibility with legacy technology (39%)

• Data protection and privacy (39%)

These are valid concerns that require a thoughtful implementation strategy.

The research shows that a majority of organizations plan to buy a solution from a new (53%) or existing (30%) vendor.

At LightSource, we believe in a partnership approach, working closely with our clients to ensure our solutions integrate seamlessly and address their specific data and security needs.

The future of procurement is here, and generative AI is a critical component. By understanding the trends, benefits, and challenges, your organization can develop a strategic approach to unlock the full potential of this transformative technology.

Questions about Generative AI in Procurement Answered in this Blog Post:

1. How is generative AI reshaping the procurement landscape?

2. What is driving the adoption of AI in procurement?

3. What are the expectations for generative AI adoption and its impact on productivity and cost reduction?

4. What are the top benefits procurement leaders are looking for from generative AI?

5. What are the key use cases for generative AI in procurement?

6. What are the main challenges procurement organizations face during AI implementation?

7. How do organizations plan to acquire generative AI solutions?

8. How does LightSource address the trends, benefits, and challenges of generative AI in procurement?